Archive for the ‘Syria’ Category


Feb

16

UBS to World Chess Federation: White Knight Takes Black Pawn


Posted by at 10:15 am on February 16, 2018
Category: OFACSyria

Visita Ilyumzhinov by Federació d'Escacs Valls d'Andorra [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via https://commons.wikimedia.org/wiki/File:Kirsan_Ilyumzhinov_2014.jpg[cropped]
ABOVE: Kirsan Ilyumzhinov
UFO Abductee

Things have not been going particularly well for Kirsan Ilyumzhinov, president of the World Chess Federation.  First, he was abducted by aliens.  Then he was designated by OFAC under Executive Order 13582 for “materially assisting and acting for or on behalf of the Government of Syria.”  Now, UBS in Switzerland has closed the accounts of the World Chess Federation, having tired of Ilyumzhinov’s repeated claims that he was about to be removed from the SDN List.

Of course, UBS in Switzerland is not subject to OFAC’s blocking rules and was not required to block or freeze the account. Rather, UBS closed these accounts based on a white money strategy of not dealing with customers subject to U.S. sanctions.  It is not clear whether this is a result of any representations or agreement made by UBS to OFAC.  In 2015 UBS settled with OFAC over charges that UBS had opened U.S. dollar accounts for another individual on the SDN list.

Of course, as we know from the Exxon case, Ilyumzhinov’s position as President of the World Chess Federation poses difficulties for any U.S. person dealing with the Federation.  Each U.S. person dealing with the Federation will need to make sure that Ilyumzhinov is not involved. Allegedly, Ilyumzhinov has claimed that he has removed himself from the “legal, financial and business operations” of the Federation until he is removed from the SDN List. Of course, he also claimed, almost two years ago, that he was going to sue OFAC, something that has yet to happen. Oh, and he also has claimed that he was whisked away in a UFO by aliens to visit a distant star. So, in my view, U.S. persons deal with the World Chess Federation at their own peril and risk.

Photo Credit: Visita Ilyumzhinov by Federació d’Escacs Valls d’Andorra [CC-BY-SA-2.0], via https://commons.wikimedia.org/wiki/File:Kirsan_Ilyumzhinov_2014.jpg [cropped]. Copyright 2014 Federació d’Escacs Valls d’Andorra

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Aug

9

If A U.S. Attorney Can’t Get Export Law Right, Why Should Anyone Else?


Posted by at 6:14 pm on August 9, 2017
Category: Criminal PenaltiesSyria

Orange Check Cashing via Google Maps [Fair Use]Rasheed Al Jijakli, the owner of Orange Check Cashing in Orange, California, has been indicted for illegal exports of tactical flashlights, rifle scopes, cameras, radios, voltmeters and laser boresighters to Syria. According to the indictment, Jijakli allegedly took the items with him on flights to Turkey, crossed the border from Turkey to Syria and gave the items to rebel groups in Syria. He was arrested on August 1 and released on a $250,000 bond pending trial.

Of course, for the criminal indictment to succeed the U.S. Government must prove that Jijakli knew that supplying these items to persons in Syria was illegal. The indictment alleges that Jijakli told an un-indicted co-conspirator “about a technique he used to smuggle goods into Turkey without being detected by law enforcement.” It also alleges that he asked the same unindicted co-conspirator if he “needed an alias in the event law enforcement questioned [him] about the purchases.” The trial and any conviction may well turn on whether a jury decides the un-indicted co-conspirator is telling the truth about these statements by Jijakli.

But the prosecution’s efforts to prove that Jijakli understood the complexities of export law sufficiently to have criminal intent will be hindered by the prosecution’s own inability to understand the relevant export laws. Paragraph 6 of the indictment says this:

6. With certain limited exceptions not applicable here, U.S. sanctions against Syria prohibited, among other things, the export,
re-export, sale, or supply, directly or indirectly, of U.S.-origin goods from the United States or by a United States person wherever
located, to Syria without prior authorization from the Secretary of the Treasury.

Nope. The Syrian Sanctions Regulations administered by the Office of Foreign Assets Control (“OFAC”) in the Treasury Department do not prohibit the export of goods to Syria. Section 542.207 which regulates exports to Syria only prohibits unlicensed exports of services from the United States or by a U.S. person. The export of goods to Syria is instead controlled by the Export Administration Regulations. Only a license from BIS is required for export of goods to Syria; no license from OFAC or the Secretary of Treasury, as the indictment would have it, is required.

If a prosecutor with a law degree can’t get U.S. export laws right, how can we expect a guy who owns a check cashing place in a strip mall to get it right?

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Nov

18

Friday Grab Bag


Posted by at 4:41 pm on November 18, 2016
Category: BISIran SanctionsOFACSyria

Grab BagHere are a few recent developments that you may have missed:

  • The House voted yesterday to nullify the impact of a license granted by the Office of Foreign Assets Control (“OFAC”) in September which would allow Boeing to sell civil aircraft to Iran.
  • On Tuesday the House passed a bill to extend the Iran Sanctions Act for another 10 years. The bill, weighing in at around 50 words, makes no changes to the Act beyond extending its expiration date.
  • The Caesar Syria Civilian Protection Act of 2016 was passed by the House on Wednesday. Named after the alias of a military photographer who has taken pictures of the conflict in Syria, the act would require blocking of foreign persons, including presumably the Russians, who provide “significant” support to the Government of Syria or the Central Bank of Syria. It will be interesting to see how this plays out if the new Administration carries out its apparent desire to cooperate with Russia in Syria. Although Russia is fighting ISIS there, it is also supporting the current Syrian regime of Bashar al-Assad.
  • The temporary general license granted by the Bureau of Industry and Security (“BIS”) to permit exports to ZTE notwithstanding its inclusion on the Entity Listwas extended by BIS today until February 27, 2017. ZTE was put on the Entity List after it diverted U.S.-origin goods to Iran.
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Aug

17

This Post About Kim Kardashian Will Leave You Utterly Speechless


Posted by at 10:19 pm on August 17, 2016
Category: SECSyria

Homs Syria by Bo yaser (Own work) [CC BY-SA 3.0], via Wikimedia Commons https://commons.wikimedia.org/wiki/File%3ADestruction_in_Homs_(2).jpg [cropped and processed]

According to this article, the Securities and Exchange Commission is sending out inquiries to certain publicly traded technology companies to ask them whether they are involved in any illegal exports to Syria. Among the subjects of concern by the SEC is a company named Glu Mobile, the perpetrator of a mobile phone game called, and I’m not kidding here, “Kim Kardashian: Hollywood.” This game allows you to “create your own star and customize your look with hundreds of style options … [and] join Kim Kardashian on a red carpet adventure.” Apparently, civilization as we know it will crumble into dust if people in Syria can play this game on their phones. (Frankly, we’d probably be better off if this game could ONLY be played in Syria, but that’s another issue.)

Glu pointed out to the geniuses at the SEC, who apparently can’t figure out how mobile phones work, that mobile games are sold through the iTunes, Amazon and Android stores and that these stores don’t permit sales to Syria. One can only imagine that the folks at the SEC must have been under the impression that mobile games were distributed on floppy disks sent through the mails.

Photo Credit: By Bo yaser (Own work) [CC BY-SA 3.0], via Wikimedia Commons [cropped and processed].

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May

17

Unintended Consequences of Sanctions Intensify Syrian Refugee Crisis


Posted by at 8:25 am on May 17, 2016
Category: OFACSyria

Syrian Refugees by Oğuzhan Ali [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/xj5B1W [color processed]

Last week I wrote about one of the unintended consequences of OFAC’s “scorched earth” enforcement policy against banks and payment processors, namely, the blocking of funds transfers where the memo or the transferee name contains a naughty word like “Cuba” or “Isis” (you know, the name of Count Grantham’s dog on Dontown Abbey). But this excellent article published by Bloomberg News suggests that there are more serious unintended consequences, namely, the potential exacerbation of the Syrian refugee crisis.

According to the article, banks are refusing to permit transfers of funds for humanitarian relief to Syria even where such transfers may be completely legal. The article cites an effort by Christian Aid, a UK charity, to transfer funds to Syria to feed people displaced by the continuing fighting. Its bank declined to transfer the funds. Such refusals, according to sources cited by the article, are a result of banks making a “rational decision” to avoid any risk of penalties, particularly where the profits to be made from a particular funds transfer might be negligible.

“The unintended consequence here is that aid is being denied to people in desperate need of assistance,” said Guy [head of Christian Aid and] a former U.K. ambassador to Yemen and Lebanon. “If this continues, it is possible to see a situation where those people who are often in most need of humanitarian aid are least able to access it.” … But such de-risking threatens to undermine the West’s push to stem the flow of migrants heading toward Europe from the embattled Middle East, according to Christian Aid’s Guy

Of course, this situation is further complicated by OFAC’s refusal to permit humanitarian funds transfers to Syria except those made, pursuant to section 542.513, by United Nations organizations or its contractors, unlike say the broader provisions relating to humanitarian activities in Sudan. Even then, the general license prohibits any blocked entity from touching the funds, setting up the compliance nightmare for the banks involved and their understandable refusal to risk yet another mega-fine from OFAC.

Photo Credit: Syrian Refugees by Oğuzhan Ali [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/xj5B1W [color processed]

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Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)